How to Handle a Breach of Contract: Legal Steps Explained

Contracts are the backbone of business and construction projects alike. They outline expectations, responsibilities, and remedies when things don’t go according to plan. But what happens when one party fails to uphold their end of the deal?

A breach of contract can cause significant financial and operational setbacks. Knowing the right steps to take—swiftly and strategically—can make the difference between resolving the issue and escalating it into a costly dispute.

At Stone & Bellus, we’ve guided businesses, contractors, and developers through countless contract challenges. Below, we outline the key steps to consider when facing a breach.

Step 1: Confirm the Breach

Not every disagreement qualifies as a breach. The first step is determining whether the other party has truly failed to meet their contractual obligations. Breaches typically fall into two categories:

• Material Breach: A significant failure that goes to the heart of the contract (e.g., failure to deliver essential goods or services).
• Minor Breach: A smaller issue that does not undermine the entire agreement but still causes harm (e.g., a delay in delivery that creates additional costs).

Correctly identifying the type of breach shapes the remedies available.

Step 2: Review of the Contract

Before taking action, revisit the contract itself. Many agreements include provisions that dictate how breaches must be addressed—such as notice requirements, cure periods, or specific dispute resolution procedures. Missing these steps could limit your options later.

Step 3: Document Everything

A paper trail is crucial. Keep detailed records of communications, missed deadlines, nonperformance, or substandard work. Emails, invoices, and meeting notes often become the foundation of any legal claim or defense.

Step 4: Provide Notice

Most contracts require written notice to the breaching party, specifying the issue and allowing time to cure the breach. Even if not explicitly required, providing notice often demonstrates good faith and may help resolve the issue without litigation.

Step 5: Consider Remedies

Legal remedies vary depending on the circumstances:

• Damages: Monetary compensation for losses caused by the breach.
• Specific Performance: A court order requiring the breaching party to fulfill their obligations.
• Termination: Ending the contract and seeking recovery for losses incurred.

Determining which remedy makes the most business sense is often just as important as the legal strategy itself.

Step 6: Pursue Resolution

• Negotiation or Mediation: Many disputes can be resolved outside the courtroom. This path can save time, money, and relationships.
• Arbitration or Litigation: If informal efforts fail, arbitration or court proceedings may be necessary. Each route carries unique procedures and considerations.

Why It Matters

A breach of contract can feel disruptive, but it doesn’t have to derail your project or your business. Understanding the legal steps—and acting promptly—helps preserve your rights and positions you for a fair resolution.

At Stone & Bellus, we’ve worked alongside clients to transform potential conflicts into manageable solutions, allowing them to move forward with confidence.

Protecting Your Interests

If you’re facing a breach of contract or want to proactively strengthen your agreements, we’re here to help. Contact Stone & Bellus to discuss your situation and explore a path toward resolution that protects your business.

Whether you’re an owner protecting your investment, a contractor seeking to meet bid requirements, or a subcontractor securing payment, understanding bonding requirements is key to managing construction risk. Don’t sign off on a bond—or assume your rights are protected—without a clear legal understanding.